July 24 2016 Latest news:
Ed Foss, Senior writer
Monday, July 11, 2011
The number of mortgages agreed for home buying increased in May, as did the number of remortgages.
The increases were evidence of “further signs of stabilisation” in the mortgage market according to the Council of Mortgage Lenders (CML), although they added that lending volumes were still weak on a historic basis.
There were 41,500 loans worth £5.9bn advanced for house purchase in May, up from 40,800 loans worth £5.9bn in April.
This is still below the level seen in May last year, when there were 43,800 advances worth £6.3bn.
Remortgage lending picked up slightly in May, with 29,000 remortgage loans advanced, worth £3.6bn, This compared to 24,700 advances worth £3bn in April.
Compared to May last year, remortgage lending has increased by 9pc in value, but remains below the recent peak in March of £4.1bn.
The majority of borrowers, more than six out of ten, continued to opt for fixed rate mortgages in May.
Lending to first-time buyers was virtually unchanged in May. 15,900 first-time buyer loans were advanced compared to 15,800 in April. The value of these loans remained unchanged in May at £1.9bn.
First-time buyers borrowed on average 80pc of their property’s value in May for the second month in a row.
This is still well below the 90pc that first-time buyers typically borrowed before 2008, but has eased a little from the 75pc experienced throughout 2009 and early 2010.
In May this year, only 3pc of first-time buyers took out an interest-only mortgage. Before 2008, it was typical for around 30pc of loans to first-time buyers to be on an interest-only basis.
Michael Coogan, CML director general said: “Over the coming months seasonal factors are likely to push up lending for house purchase.
“There is no evidence of any drastic changes on the horizon or any significant shifts in direction for the mortgage market.
“These stable conditions are expected to continue for the rest of the year.”